US gambling industry strategist Chris Grove, Managing Director of Eilers Research outlines the US betting landscape in 2018.

As New Jersey and US pro-betting advocates fight to repeal PASPA laws, Grove details to SBC readers stakeholder-wide concerns relating to licensed sports betting, which if approved will be implemented within a changing US sports landscape.

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SBC: Hi Chris, great to catch up on this intriguing subject matter. As MD of Eilers Research what key factors and dynamics has your consultancy chosen to focus on with regards to the US’s complex sports betting debate?

Chris Grove: We have a twin focus when it comes to regulated sports betting in the United States. First, we’re interested in the ever-changing legal and legislative landscape surrounding the U.S. sports betting market. Second, we’re engaged with the complex question of the actual market potential for regulated sports betting in America.

When you unpack those areas, you end up wrestling with some interesting questions. How will the demand for black market sports betting flow into the regulated market? How will different states with different commercial gambling dynamics approach sports betting? How will the U.S. market mirror current regulated international markets such as the United Kingdom, and where will it diverge from those established markets?

SBC: Since 1992, US betting stakeholders have looked to overturn PASPA provisions, allowing for state-licensed betting. How has the debate and its context changed for US sports betting and its wider stakeholders?

CG: Without a doubt, we are where we are today as a direct result of New Jersey’s commitment to challenging PASPA. There’s plenty of credit to be spread around on that front, but you have to single out State Senator Ray Lesniak when discussing the political champions behind New Jersey’s effort to dismantle PASPA. Without the state’s willingness to place a significant bet on a challenge to PASPA – a bet that cost the state no small amount of time and money – I don’t think we’d be having this conversation or one even remotely close to it.

SBC: In its Supreme Court appeal, New Jersey deems PASPA to be unconstitutional. However, is a pro state-level outcome the best solution for US Sports Betting… Should all stakeholders’ push for a federal sports betting industry code?

CG: Historically, gambling regulation has been an issue left to the states, and in my view, there’s not a compelling reason why sports betting should deviate from that tradition. There are certainly some stakeholders who would prefer a federal solution. Sports leagues, for one, have voiced support for that path. I’m sure there are some on the gambling industry side who would also favour that approach. But the consensus from industry stakeholders that I’ve spoken to is that states are best positioned to oversee regulated sports betting.

There’s also a pragmatic consideration in play. You can argue about whether a state-by-state or a federal solution is optimal from an operational point of view, but I don’t think there’s much argument on the question of which is poised to act quickly. It’s not hard to imagine a significant number of states moving forward with regulated sports betting in relatively short order following the end of PASPA. It’s quite difficult to imagine the federal government moving with any sort of speed on the issue. So even for those who prefer a federal solution in theory, the state-by-state solution may still make the most sense in practice.

SBC: Furthermore, the US betting debate is taking time during a period of disruption in sports (changing consumer habits, new technologies etc) and changing global dynamics. Is US sports and betting going to see a new set of power players in 2018?

CG: Possibly at the fringes – perhaps with data collection, data services in general, innovative ways to bet or pool players’ bets. But I believe that the core power players at the onset of regulated sports betting in the U.S. (assuming a positive decision from the Supreme Court) will broadly echo those who dominate the conversation today. The one major x-factor: state lotteries, who are largely publicly silent on the issue today, but could wield significant influence over how a national market rolls out.

With that said, the longer the market takes to launch, the greater the chance for disruption.

SBC: All global gaming executives monitor the US market closely. From your perspective and experience, what do international stakeholders fail to understand with regards to regulating US sports betting?

CG: They may fail to fully appreciate just how complex the state-by-state picture is from a political and policy perspective. Some international operators are far more familiar with the nuances of that reality than others.

They may also fail to appreciate how fragmented the U.S. regulated gambling industry is, with tribal casinos, commercial casinos, racetracks, lotteries, and other stakeholders often maintaining clashing agendas. The unique dynamic caused by the dominance of land-based gambling, and a relative absence of online gambling, is also a unique factor. Finally, how large and entrenched the black market for sports betting is in the U.S. might not fully register with all stakeholders from the global market.

SBC: Finally in 2018, From your leadership perspective, what will you deem as effective progress for the US Sports betting debate… Can US betting survive another false dawn?

CG: Obviously everyone is looking for a positive decision from the Supreme Court. But even in the absence of that decision, we’ve still breached a critical threshold – arguably a point of no return – when it comes to the momentum behind regulated sports betting. Public attitudes, the position of many of the major sports leagues, and political support have all changed to a degree where regulated sports betting truly does seem to have moved from a matter of if to a matter of when.

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Chris Grove – Managing Director – Eilers Research

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